What Happened?
Shares of game engine maker Unity (NYSE: U) jumped 15.4% in the morning session after a significant block of 1.32 million shares valued at $29.7 million was traded. Additionally, Keith Gill (aka Roaring Kitty of GameStop/Reddit fame) posted a short video clip of late musician Rick James on social media platform X (formerly called Twitter), who famously recorded a song titled "Unity," sparkling unverified rumors he could be linked to the trade. However, there is no other evidence that Roaring Kitty is tied to the block trade.
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What The Market Is Telling Us
Unity’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. But moves this big are rare even for Unity and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 5.6% as the major indices tumbled (Nasdaq down 1.9%, S&P 500 down 1.7%), marking a volatile ending to an otherwise good year for stocks. This marked the second straight day of broad-based declines with similar downturns (Nasdaq down 1.5%, S&P 500 down 1.1%) recorded on the previous trading day, Friday, December 27, 2024. This suggests that perhaps investors are locking in gains and positioning portfolios for 2025.
Unity is down 35.1% since the beginning of the year, and at $25.16 per share, it is trading 35.5% below its 52-week high of $38.98 from January 2024. Investors who bought $1,000 worth of Unity’s shares at the IPO in September 2020 would now be looking at an investment worth $368.18.
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